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State House Dome

Garry Rayno's State House Dome: Windfall in April fuels debate in May

The state's budget picture became clearer if not brighter last week with a nearly $50 million windfall for April.

Coupled with strong numbers from March, the additional money effectively wipes out what once appeared to be a $40 million deficit and has some officials - including Gov. Maggie Hassan - talking about building up the state's long neglected reserve account, or rainy day fund.

Granted, there was about $28 million in one-time revenue in April, including $21 million from a second settlement with tobacco companies and $6.4 million from MTBE settlements with oil companies, but business taxes for the second month in a row were more than 20 percent higher than forecast.

March and April are the two biggest revenue months for the state because of business tax returns, with which some companies "true up" with the state in making their final quarterly payments before the fiscal year ends.

June is also another big month for business taxes, and with companies' tax estimates running about 7 percent higher than anticipated, the state may indeed end the fiscal year with an even greater surplus.

The Senate Ways and Means Committee will meet Monday to work on its best guess of the money state government has to spend over the next two fiscal years. The Senate Finance Committee needs to know that number before deciding where the money should go.

With revenues surging and two months to go in fiscal 2013, Senate budget writers will likely bump up forecasts for the next two years.

Additional money may pay for some things the House cut from Hassan's proposed budget, such as aid to the University System of New Hampshire, money to reimburse hospitals for uncompensated care they provide, new charter schools and the restoration of the school building program.

So where's the bad news? That depends on how you want to fund state government.

If, for example, you want casino revenue and fees to be added into the mix, additional money from the traditional sources is not going to help your cause.

The House will act on Senate Bill 152 - which would legalize one casino - before the end of the month. The bill is sponsored by Sens. Lou D'Allesandro, D-Manchester, and Chuck Morse, R-Salem, among others. Morse is chairman of Senate Finance Committee, and D'Allesandro is a member. Hassan backs the bill and included $80 million from casino licensing fees in her proposed two-year budget.

The greater the gap between what lawmakers want in the budget and the money to pay for it, the more pressure on House members to pass the gambling bill. The House has never passed expanded gambling.

After the House passed its budget without the $80 million from a casino license, Morse attacked the plan. He said it is millions of dollars short in real money, citing revenue projections for the Medicaid Enhancement Tax that he said were about $50 million a year over what lawmakers could expect to receive from hospitals.

He and other Republican senators have made clear they are prepared to cut the House budget, and if the House wants to avoid that, the message is: Pass SB 152. But with state revenues finally picking up after several years in decline, the pressure is decreasing, not increasing, for casino revenue.

House Speaker Terie Norelli, D-Portsmouth, created a supercommittee of Finance and Ways and Means members and three subcommittees to review and work on the bill.

The subcommittees will report their findings to the joint committee Thursday, and some proposed changes will be aired, such as reducing the casino licensing fee while taking a greater percentage - 37 instead of 30 - of the net video slot machine proceeds and restricting the seating for live entertainment acts. There is little doubt, however, the supercommittee will recommend the bill be killed.

The full House could vote on the bill as early as May 22.

About 20 percent of the House members have yet to decide how they will vote, but those undecided representatives will determine SB 152's fate. Right now, there are not a lot of good reasons for those fence-sitting members to vote for SB 152, particularly when the state could have a $50 million or more surplus when fiscal 2013 ends June 30.

Medical marijuana: Of all the bills coming through the Legislature this year, no bill has more emotional weight attached to it than House Bill 573, which would allow use of marijuana when prescribed by a doctor to treat certain illnesses.

As a state senator, Hassan supported medical marijuana twice, and as a candidate for governor, she supported the concept.

Supporters had high hopes going into the session, but the bill ran into opposition right away from the New Hampshire Police Chiefs Association, the Medical Society and other groups.

Proponents were able to placate if not remove the Medical Society's and the Attorney General's Office's objections, but were not able to sway other law enforcement organizations.

The key issue is whether eligible patients would be allowed to grow their own marijuana supply or would have to buy from state-regulated dispensaries.

The Senate Health, Education and Human Services Committee began its final work on the bill last week, and Hassan, citing the concerns of law enforcement officials, told members by phone she would not support the bill unless the home-grow provision was removed.

That upset committee member Sen. John Reagan, R-Deerfield, who said, "Sick people are not criminals, so why is the governor listening to law enforcement's worries about them. I guess she just doesn't' care about sick people."

Reagan and others on the committee are pushing for a greater number of dispensaries, but would really rather have the home-grow provision in the bill because it would lower the cost for poor and lower-income people suffering from cancer, glaucoma, hepatitis C, muscular dystrophy, Crohn's disease or other debilitating diseases.

The bill passed the House by an overwhelming 286-64 vote and is likely to pass the Senate. The question is: Do supporters want some medical marijuana available to those who could benefit from it, or do they dig in their heels and include the home-grow provision.

The committee meets Tuesday to try to finalize its recommendation on the bill.

Internet Sales Tax: Last week, Senate Democrats blind-sided the Republican majority with a proposal to introduce a joint resolution thanking the state's congressional delegation for its opposition to the national Internet sales tax being considered in Washington.

The resolution served several purposes. All session long, the Senate majority has refused to take up resolutions from the House or from minority Senate members.

Resolutions do not have the force of law unless they are joint, concurrent resolutions and then only for the length of the two-year session.

Earlier in the week, the state Republican Party went after Norelli, who is the president of the National Conference of State Legislators, because the organization backs the national Internet sales tax. And voting against the resolution would certainly be used by the opposing party during the next election.

The Republican majority postponed action on the proposal, which needs a two-thirds majority to suspend the rules to take it up.

At the end of the calendar, all but one Republican voted against suspending the rules to let the resolution before the body, which ended in a 12-12 tie and failed.

Although essentially nothing happened, that didn't stop the two parties from spending an inordinate amount of energy on social media going back and forth over the resolution and who supports and doesn't support the Internet sales tax.

Political gamesmanship and the gotcha game at its best.

Correction: In last week's column, I said former House Speaker William O'Brien led a walkout at a Republican caucus several weeks ago. O'Brien had not attended a Republican caucus this session until the April 24 caucus, when he appeared with state GOP Chairman Jennifer Horn to tout party unity.